E*Trade Completes $150M Stock Offering

NEW YORK (TheStreet) -E*Trade Financial (ETFC) took advantage of recent positive market momentum to quickly complete a $150 million stock offering, the company said Wednesday.

E*Trade sold 80.2 million shares in a so-called "at the market," or ATM, offering. This method of raising capital allows a company to sell new shares at the prices prevailing in the open market, as opposed to a secondary offering, in which the company sells stock to a group of institutional investors at an agreed-upon price, usually a discount to where the stock is trading.

The New York-based online brokerage said the offering had gross proceeds of $150 million (net proceeds were $147 million after commissions and offering expenses). Sandler O'Neill & Partners acted as the sole distribution agent for the offering.

The company's stock has been in heavy rotation of late with volume from the past three sessions totaling more than 850 million. E*Trade and Citigroup (C) have been, by far, the most actively traded issues on U.S. exchanges this week.

All that volume has come with gains. Based on Tuesday's close of $1.92, the shares was up 13% since Thursday's finish at $1.70. The stock is off a penny to $1.90 Wednesday afternoon with volume recently above 87 million. It's traded in a tight range of $1.88-$1.95 for the session.

While the company has been troubled by underwater home equity and other mortgage loans as well as a devalued securities portfolio, E*Trade recently completed a recapitalization plan through debt swaps and an equity offering, and still has a well-performing brokerage business. It also has hedge fund giant Citadel Investments as its largest debt and equity holder.